The decline and fall of General Motors, which sees it heading toward liquidation from its status as arguably the most powerful corporation on earth more than half a century ago, is entering a new phase. The federal government’s mandated conversion to electric vehicles is taking another big bite out of its organization. Ron Glon writes:
In 2022, General Motors gave Buick dealers across the nation a simple choice: invest a significant amount of money to prepare for EVs or opt for a buyout. Over a year later, the brand has reportedly lost nearly half of its dealerships as it prepares to roll out its first electric cars.
Trade journal Automotive News reported that the number of Buick dealers in the United States dropped by about 47% during 2023. At the beginning of the year, the network included 1,958 stores; fast-forward to December and that figure stands at approximately 1,000. More dealers could throw in the towel in the coming weeks, as the publication adds that the buyout program remains open and will continue.
Dollar figures haven’t been released, so we don’t know precisely how much money a dealer who opts out can claim from General Motors or how much money a dealer needs to spend to stick with the brand. However, the latter figure falls somewhere between $300,000 and $400,000, Automotive News learned. Dealers notably need to invest in equipment (such as charging stations) and training.
Buick doesn’t seem fazed by the exodus.
Most of the dealers leaving the business can safely be assumed to be in the smaller half of the network, so the impact on sales will be less than half, but the move still signals a permanent downsizing of Buick, once one of the crown jewels of GM’s and the American auto industry’s product portfolio. Alfred P. Sloan, who created the juggernaut that GM became in the first half of the 20th century, shoving aside Henry Ford’s eponymous company that created the mass market for cars, saw Buick as the luxury end of the mass-scale middle market. It would have higher margins and profits than Oldsmobile and Pontiac, the other 2 middle market brands he created above low-price market-dominating Chevrolet while existing below the much more expensive and lower market share Cadillac. For decades, Buick was known as “the doctor’s car,” appealing to well-compensated professionals and business owners. […]